Online tax help gets personal

Tax preparers offer more customer service, on the tablet and smartphone

The big news in do-it-yourself tax preparation is help. Lots of it. The tax software companies have come to the conclusion that the only way to woo taxpayers away from tax professionals is to offer answers. Not just technical guidance on how to use their software, but also tax advice and audit support. Table: Tax preparers’ early-bird prices

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Mobile filing has expanded this year. Everyone’s website can be viewed and accessed from mobile phones and tablets. H&R Block is offering free federal preparation and filing (there’s a fee for state taxes) for mobile users. TurboTax charges $24.99 to file a 1040EZ and 1040A via their mobile app. You can even start your tax returns on the apps and then enter more detail when you return to your laptop or desktop. Data is integrated from all sources. Most mobile apps, including the IRS’s IRS2GO service (irs.gov), also provide information such as tax-law updates and news, as well as where’s-my-refund tools.

With H&R Block and TurboTax, you can scan W-2s and related documents and upload them directly into the software. While TaxACT’s software can’t read your docs, its new DocVault service (taxact.com) allows you to upload tax-related documents and receipts and store them with your tax file. This service is free to anyone, and includes up to 3 gigabytes of storage. Images are imported directly into your tax file in the TaxACT Deluxe and Preparer’s Enterprise editions.

Two major online filing services are affiliated with storefront tax preparation operations — H&R Block and eSmart Tax, a division of Liberty Tax.

eSmart Tax finalized its purchase of CCH’s CompleteTax consumer software right after Christmas 2012. It hopes to expand its market share in the online-preparation industry — and to bring more taxpayers to their Liberty Tax Service franchisees.

H&R Block is expanding last year’s newest service — H&R Block Live (hrblock.com). Instead of going to the local office, you can work with an H&R Block preparer in real-time via the magic of video conferencing. You will be paying store-front fees, however, rather than the cheaper online-tool rate. For the best H&R Block value, look at their Best of Both service (hrblock.com). You can get nearly the same level of service as their Live version, for a flat fee. The big difference between the two services? In the Live service, they prepare the whole tax return for you. In Best of Both, you make all the entries, but can get unlimited answers and a full review of the tax return you prepared.

Speaking of looking at your work, both TurboTax and eSmart Tax customer service folks can look at your input and see what you’re doing wrong (or right). This can take extra time — but there’s no extra charge.

In-depth audit support is coming into vogue. TurboTax has expanded its Ask a Tax Expert crew, for instance, a team that can answer detailed tax questions and to walk customers through sticky problems. H&R Block has offered full audit support for years. Its service goes well beyond the advice realm — it promises to send an enrolled agent with you to your audit. eSmart Tax underwrites the cost of your personal audit support, provided by its expert franchisees, as well. TaxACT (taxact.com)and TaxSlayer (taxslayer.com) only provide audit guidance. However, you can pay for audit support through TaxACT’s Tax Audit Defense service.

Specialized tools

You may be familiar with the Free Application for Federal Student Aid, especially if you have college-age children or you attended college not too long ago yourself. TaxACT is the only service that includes a Fafsa application tool. (fafsa.ed.gov)

H&R Block is the only service providing a review of your health-care tax issues (hrblock.com) under the Affordable Health Care Act. The tool, embedded in their software will help customers plan for next year’s tax credit or the need to buy their own health insurance.

Lots of imports

All the tax return services allow users to import PDF versions of tax returns prepared using their major competitors, plus data from W-2 Express and several payroll services. H&R Block, TurboTax, TaxACT and eSmart Tax import investment income and trading transactions from Gainskeeper (onlineint.optionsxpress.com) and several major brokerages, including Schwab, Merrill Lynch and Morgan Stanley. H&R Block has beefed up its imports by adding more payroll providers and financial institutions, as well.

The goal is to be able to import enough information from outside sources so you can finish your tax returns with as few keystrokes as possible.

Naturally, with that in mind, each company has improved its interview process to shorten it and to tailor the questions to particular income and expense situations. Return customers’ questionnaires are based on their income and expense sources from last year. That means you’ll get reminders about things like last year’s unemployment income or pension income. But you’ll also be able to add income and expense categories if you simply click on additional information.

Help tools within all the software is more intuitive and at your fingertips. You’ll have in-depth reference databases that are subject-sensitive — directly related to your screen or even the line you’re trying to fill in. Of course, if you need help, you can certainly get assistance via online chat or a phone call.

Archives

One of the advantages of working with the same software company, year after year, is that it’ll have your prior year completed tax returns in its databases. (If you set up a free account and started a tax return, without finalizing it, however, those files are all purged.) Generally, you’ll be able to import the prior-year data into your current year tax return. However, if you need earlier years, just ask customer service.

Prior customers of CCH CompleteTax will be able to roll their data over into eSmart Tax with ease. It’s the same software. In fact, customer service can probably access the last two years’ returns for you. Anything prior to that, they can get from CCH on your behalf. So don’t worry about the changed name. All you have to do is ask —and to sign the consent form allowing them to access the file for you.

Multiple states

The need to file tax returns in several states is growing. Especially since steady work is hard to find in your home state. When multiple state returns need to be filed, you’re better off working with a tax professional who has experience. But if you want to do it yourself, only TurboTax and TaxAct offer this capacity. H&R Block says you will need the AtHome edition (the box or software download) or the Best of Both service to do this. You will definitely want someone to review your tax return before you file it.

Shopping for price?

For slightly complex tax returns with no audit fears, you’ll find that TaxAct has the lowest price. (See the chart) For $17.95, you get a federal and state tax return and answers to your questions. You get a Fafsa tool, a Document Vault, a glossary and lots of goodies.

But each and every service has something unique to offer. So don’t make price your only criteria. You can test each program for free and see if it meets your particular job, business or industry need.

Next week, we’ll talk about the free filing options — the ones offered by these companies, by the IRS and the rest of the FreeFile Alliance. No rush. The IRS isn’t accepting e-files until Jan. 30 anyway.

Eva Rosenberg is the publisher of TaxMama.com , where tax questions are answered. She is the author of several books and ebooks, including the newest edition of Small Business Taxes Made Easy. And she teaches a tax pro course at IRSExams.com.

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